From afar: Fine line between profitability and community

Despite concerns about "selling our rugby assets", it has
been announced that the Hurricanes and Crusaders have found a
licence arrangement that suits all parties, but the Blues and
Chiefs are yet to get the nod of approval from the New
Zealand Rugby Union.

The Highlanders must be letting out an audible sigh of relief
that they have been excused from this drawn-out and
complicated process.

Initially, the NZRU's main goal in seeking these licence
agreements was to inject extra capital, sharpen governance
and find some new approaches to the Super rugby product.

Ultimately, if these goals are achieved, the NZRU has a lot
to gain, but what is in it for investors?

More often than not, professional sports teams have not been
sound financial investments (with exceptions such as
Manchester United). So what motivates an individual or
consortium to put their hands in their pockets and help out
the NZRU?

Economist and philanthropist Gareth Morgan has taken a 12.5%
share in the Hurricanes and the multi-millionaire is the
first to admit this will not generate huge profits.

Buying a share of the rugby franchise is part of Morgan's
bigger vision that involves several Wellington-based
franchises including the Phoenix and possibly twenty/20
cricket or netball franchises in the future. His vision
involves getting these franchises to work together and share
resources (create joint ticket deals, season passes, and a
high-performance sports facility), so the Wellington region
and its community will ultimately benefit.

It is a lofty vision, especially in parochial New Zealand
where we fight over scraps when it comes to a share of our
small market.

This parochialism raises the other worrying aspect of these
licence agreements. The Wellington Rugby Football Union holds
a 50% share in the Hurricanes, and there is still a 12.5%
share available to other provincial unions in the Hurricanes
area. How are struggling unions meant to step up when they
can't even stand on solid and sustainable ground?

Doesn't this defeat the purpose of injecting extra capital
into the game if the NZRU gives with one hand at one level,
and takes away with the other at a higher level?

The franchises also seem to be getting mixed messages. It is
okay, for instance, that 62.5% of the Hurricanes franchise is
in the hands of provincial unions, but the Chiefs governing
structure has been told by the NZRU it is too provincial
union-oriented and needs to be more commercially-focused.

Rather than aspiring to be like Manchester United, I hope the
franchises and the NZRU are inspired by the model that works
for the Green Bay Packers, a publicly-held corporation that
is immensely profitable, where the franchise has flourished
despite being based in a town with a population of 102,000.

The Packers have managed to not only survive but to thrive,
and Green Bay was named by ESPN as the best franchise in all
of sport.

The Packers have sold out nearly 300 consecutive home games,
have 80,000 names on the waiting list for season tickets, and
were the 11th highest-revenue team in the NFL in 2011.

Packers management suggest they are so successful because
they constantly maintain the product on the field and the
community's warm feelings about that product. They walk the
fine line between profitability and community.

If Morgan's lofty vision of getting different sports codes to
work together for the sake of Wellington, and the Chiefs'
on-field performance and connection to their community is not
forgotten, maybe the New Zealand Super rugby franchises under
their new licence arrangements will be able to walk this fine
line, too.